TY - JOUR
T1 - The economics of orchards
T2 - An exercise in point-input, flow-output capital theory
AU - Mitra, Tapan
AU - Ray, Debraj
AU - Roy, Rahul
N1 - Funding Information:
*The authors thank Aloisio Araujo, R. B. Bapat, Doug anonymous referee for useful comments and suggestions. gratitude for a pleasant stay at the Instituto de Matematica Brazil, where a substantial part of this article was written. supported by a National Science Foundation Grant.
PY - 1991/2
Y1 - 1991/2
N2 - This paper is concerned with the qualitative properties of optimal intertemporal programs in a model of point-input flow-output capital theory, when future utilities are discounted. Under a mild condition on the flow-output vector, we establish that optimal programs for every discount factor and every initial state (other than a unique stationary optimal state) will exhibit non-convergence. Furthermore, we provide a necessary and sufficient condition on the flow-output vector for which a neighborhood turnpike theorem holds; that is, long-run fluctuations on an optimal program are "small" when the discount factor is "close" to unity.
AB - This paper is concerned with the qualitative properties of optimal intertemporal programs in a model of point-input flow-output capital theory, when future utilities are discounted. Under a mild condition on the flow-output vector, we establish that optimal programs for every discount factor and every initial state (other than a unique stationary optimal state) will exhibit non-convergence. Furthermore, we provide a necessary and sufficient condition on the flow-output vector for which a neighborhood turnpike theorem holds; that is, long-run fluctuations on an optimal program are "small" when the discount factor is "close" to unity.
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U2 - 10.1016/0022-0531(91)90141-P
DO - 10.1016/0022-0531(91)90141-P
M3 - Article
AN - SCOPUS:0002921783
SN - 0022-0531
VL - 53
SP - 12
EP - 50
JO - Journal of Economic Theory
JF - Journal of Economic Theory
IS - 1
ER -